Recovery & Inflation: Rowing Between Scylla & Charybdis

PAID SUBSCRIBERS ONLY: First Draft of a Project Syndicate Column

Two years ago, when the Biden administration-to-be was planning how to try to manage the macroeconomy, it sought to avoid three mistakes.

The first mistake was the trap into which the Obama administration had fallen: failing to prioritize properly and to set up the game board for the rapid return the economy to full employment. The Obama administration had a plan for a first round of recovery measures. It had no plan for what it would do if Republicans and blue-dog Democrats proved obstreperous, and its first round failed to do the entire job. The cost was a lost half-decade of growth, and a further widening of income inequalities. The Biden administration was not going to make that mistake, but would, rather, prefer to make its own different mistakes.